By Andrew Bary

Weyerhaeuser CEO Devin Stockfish says the company is well positioned to take advantage of an upturn in depressed prices of lumber and other wood products that he feels are "unsustainably" low.

In an interview with Barron's, Stockfish said the company is "operating from a position of strength" thanks to initiatives taken to lower costs and boost productivity in recent years.

That is helping Weyerhaeuser ride out one of the rockiest periods for the forest-products industry in the past two decades. "We're in a class of our own," he says.

The company is the largest holder of timberland in the U.S. and a leading producer of logs, lumber and oriented strand board. Weyerhaeuser held its first investor day last week since 2021 and investors liked what they heard as the company set ambitious financial targets through 2030.

Weyerhaeuser's goal is to boost its Ebitda (earnings before interest, taxes, depreciation and amortization) by $1.5 billion by 2030 off a base of about $1.2 billion in 2024. Only $500 million of the gain would come from better pricing.

Weyerhaeuser stock, which finished Tuesday at $23.28, was the subject of a bullish rec ent Barron's profile before the investor day.

The shares are up about 5% since our article ran, but they are down nearly 20% so far in 2025 and are below where they stood 10 years ago. We argued that the valuable timberland -- estimated to be worth more than the company's current value -- offered downside protection and that the stock has significant upside if wood products markets improve.

The company now has a market value of $17 billion plus debt of about $5 billion.

"We are encouraged by the ambitiousness of the targets and ultimately what success would likely mean for the stock," wrote Davidson analyst Kurt Yinger in a client note. He has a Buy rating and price target of $31 a share.

BMO Capital Markets analyst Ketan Mamtora wrote that the event was "constructive" and said the stock offers "very attractive value" at a 38% discount to his estimate of the company's net asset value. He has an Outperform rating and $38 price target.

One negative is that the company's debt levels now are elevated relative to currently weak cash flow. Debt equals about four times trailing earnings before interest, taxes, depreciation and amortization in the past four quarters. Many companies like to keep that ratio under three.

Lumber and other wood products prices are depressed mostly due to weakness in new housing activity -- a critical market for wood products.

Lumber prices are down about 20% this year to about $550 per 1,000 board feet on futures markets. The company says lumber and oriented stranded board are at "historically low levels on an inflation-adjusted basis." Some Weyerhaeuser rivals are operating at a loss and capacity is getting reduced in the industry as some plants close. More shutdowns may be needed to boost pricing.

Stockfish says Weyerhaeuser is in the best quartile of the industry based on its cost structure -- which reflects in part its huge U.S. timberland holdings of over 10 million acres, including more than two million in the Pacific Northwest. Forest is more valuable there than in the South due to high prices for logs from Douglas fir trees that often are exported to Asia.

The company has developed a sizable Climate Solutions group that seeks to capitalize on demand for its land from solar and wind power developers. Weyerhaeuser also is selling its forests as a carbon sink to companies seeking to offset their carbon emissions or burnish their green credentials.

Weyerhaeuser set an annual Ebitda target in 2030 of $250 million for that business, up from about $100 million in 2025.

The company, structured as a real estate investment trust, is now operating at just above break-even based on GAAP accounting (generally accepted accounting principles) and is expected to generate about 80 cents a share this year in funds available for distribution, a REIT cash flow measure.

It will continue to target a 75% to 80% payout of funds available for distribution in dividends and stock buybacks through 2030. The stock now yields almost 4%. If the company can hit its 2030 financial targets, funds available for distribution per share could hit about $2.50.

"We feel good about the things under our control," Stockfish told Barron's. "We're well positioned to take advantage as the market starts to turn."

Write to Andrew Bary at andrew.bary@barrons.com

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December 16, 2025 17:06 ET (22:06 GMT)

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